Canada-China Relations Committee on Nov. 29th, 2022

[Paul Thoppil]

Thank you very much for the question.

Minister Ng has been clear that we will continue to trade with China, and Minister Joly has also been very clear that Canadian businesses should engage in trade with China but take a wide eyes-open approach.

The Government of Canada is trying to be helpful to Canadian businesses by ensuring that Canadian business revenue is not dominated by a revenue flow that comes from autocratic states, whereby we have seen sudden cut-offs and unpredictability. Therefore, we're trying to facilitate that diversification through various free trade agreements and other mechanisms in order to encourage Canadian businesses to reduce their dependency

Thank you.

[The Chair, Liberal, Ken Hardie]

Thank you very much, Mr. Chong.

We'll go to Mr. Oliphant, Mr. Bergeron and then Ms. Blaney for two and a half minutes each.

[Rob Oliphant, Liberal, Don Valley West, ON]

I just want to know whether you have any comment on the recent resignation of Taiwan's president as the chair of the party and what those losses for her party in the local elections mean with respect to the relationship between Taiwan and the People's Republic of China. She has occupied that position of chair of the party a number of times but resigned because of losses in local elections, which is what I read in the newspaper.

That had been an election issue, apparently, in the local elections, causing her then to have losses and then moving.... I'm just wondering: Is there a shift in the attitude in Taiwanese people or were those local elections about something else? Elections are sometimes about not what we think they're about.

[Paul Thoppil]

If I may, Mr. Chair, I'll respond initially, and then I'll encourage my colleague Weldon to respond as well.

I think what you have seen with the step-down is really a strong signal of democracy and a tone of leadership, whereby a party leader has seen a party not do well in elections and takes accountability. That is something that I think all democracies should take note of and take pride in going forward.

It was a local election. It wasn't a national election. I think voters in a local environment are looking for different things at the local level than the national one.

I'll turn to Weldon.

[Weldon Epp]

Mr. Chair, that largely covers it.

The short answer to the member's question is, I don't think there's any credible evidence that the results of the local elections suggest a shift in fundamental attitudes of the Taiwanese people towards their own future and the posture of the PRC.

One of the wonderful things about elections in Taiwan is that often, even at the national level, a lot of people aren't voting because of the topics that we pay attention to, such as cross-strait tensions. The friends we have in Taiwan are often focused on local issues such as environmental issues, etc.

While I think one of the parties tried to make it about that and campaigned on it, I think the result was quite resounding, and I think it's one of the reasons that the result you referred to, the stepping down as party leader, was the step taken.

Thanks.

[The Chair, Liberal, Ken Hardie]

Thank you, Mr. Oliphant.

Mr. Bergeron, you have two and a half minutes.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you, Mr. Chair.

According to Canada's Indo-Pacific strategy, Canada will work with partners to strengthen and expand the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, and ensure that any form of expansion will be based on high standards and track records. It also says that Canada will strengthen its ties with Taiwan, including trade ties.

Given the circumstances, does that mean that Canada will advocate for Taiwan to join the CPTPP?

[Paul Thoppil]

Mr. Chair, I think the focus by CPTPP members, including Canada, is to ensure that the first accession member into the CPTPP, which is the U.K., meets the high bar that's embedded in the agreement through the results of the negotiations. It's clear that there is still work to be done in that regard with the U.K. before there is a satisfactory conclusion.

The CPTPP members are very mindful of the fact that the first member post the agreement in terms of accession is a precedential one, because it sets the bar for all of the others who aspire to join, and that includes Taiwan. The CPTPP members are saying that we really have to get the U.K. one right first. That's what the focus is on now. There is no real conversation at this juncture with regard to others that have expressed interest related to entry.

[Stéphane Bergeron, Bloc, Montarville, QC]

The PRC has also expressed an interest in joining the CPTPP. Do you think that will make some members more reluctant to consider Taiwan's possible entry, even though many argue that Taiwan already satisfies a number of the admission criteria, unlike China?

[Paul Thoppil]

I think CPTPP economies are very mindful of the interest of China and Taiwan in there. I think they're also mindful of Taiwan's ability in terms of meeting the high standards. I think there may be some questions with regard to China's ability to do so, but China also brings significant market access and elements there.

Quite frankly, the focus is really not on those parties. The focus is really on the U.K. and getting the U.K. negotiations right.

[The Chair, Liberal, Ken Hardie]

Thank you, Mr. Bergeron. I appreciate that.

Ms. Blaney, you have the final two and half minutes.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Well, Chair, I have one only question, so we'll see how long it takes.

We know that Taiwan is a champion of the UN sustainable development goals. Can you share with us in what ways Canada can learn from Taiwan and collaborate moving forward to ensure that Canada delivers on its development commitments?

[Weldon Epp]

Sure. Thank you for the question, Mr. Chair.

I think there are a number of areas in which we encourage growing collaboration between not only relevant government agencies that are responsible for different aspects of UN development goals but also civil society. I think those would include the deep collaboration that we've already seen for decades between Canadian and Taiwanese indigenous communities, meeting both developmental and cultural preservation heritage objectives of indigenous communities. We've seen this with respect to learning from the Taiwanese and how they manage health outcomes. It's a very different environment from Canada's, but it's an environment in which they have adopted in the past much of the Canadian approach to the public health system and public health insurance, but with local characteristics.

When things like SARS have broken out, or the pandemic that we're currently experiencing, we've taken advantage of that opportunity to look at not only how Taiwan is managing those health outcomes but also at whether there are lessons learned there for the work we do as a member of UN agencies across the commitments of the UN to global health or development outcomes.

Beyond that, Taiwan offers a very interesting governance story, a positive story, that gets at the capacity to move from being one of the poorest countries in Asia only a hundred years ago, or one of the poorest jurisdictions, to being an economy today that is dynamic and has a high GDP per capita but is also very inclusive in terms of participation by women and participation by other minority groups. There are a lot of lessons there.

Canada has worked with other partners and Taiwan through something called the GCTF, a global initiatives platform. Although outside the UN system and outside international organizations, it's a platform that the Taiwanese government has put in play to offer its best practices. We've now sponsored two of those events. We look forward to working with Taiwan, Japan, the U.S. and others to bring to the fore Taiwan's unique experiences even though it's not able to sit at UN organizations and do so formally itself.

Thank you.

[The Chair, Liberal, Ken Hardie]

Thank you very much.

That brings to a close our first panel this evening.

I'd like to thank our three guests for appearing this evening.

Yes, sir.

[Rob Oliphant, Liberal, Don Valley West, ON]

On a point of order, Chair, I just want to ensure that it's not too late for the testimony in this panel to be included in the report. We started doing drafting instructions for last week, and I'm hoping it's still open. This is mainly on the clarification between the one China principle and the one China policy. I think this was the first time we had that really clearly stated for our committee.

Is that okay?

[The Chair, Liberal, Ken Hardie]

Yes. The analysts are nodding. As we mentioned off the top, we can use the material we heard in our first panel on the Taiwan study and on the trade study that we're starting now.

We'll pause for a moment, then, to set up our second panel.

[The Chair, Liberal, Ken Hardie]

Welcome back, everyone. We are resuming the meeting with our second panel of witnesses.

I'd like to welcome our witnesses. As individuals, we have Dr. Geneviève Dufour, professor of international law at the Université de Sherbrooke, and Dr. Laura Murphy, professor, human rights and contemporary slavery, Sheffield Hallam University, where it is 1:30 in the morning.

From the Uyghur Rights Advocacy Project, we have Mehmet Tohti, the executive director, and Kayum Masimov, project manager.

Each group will have five minutes to make an opening statement.

We will begin with Dr. Dufour, for five minutes.

[Dr. Geneviève Dufour, Professor of International Law, Université de Sherbrooke, As an Individual]

Thank you, Mr. Chair.

Honourable members of the committee, good evening, and thank you for inviting me.

I am a professor of international law, and the focus of my research is the intersection between international trade law, human rights and environmental law.

My interest in Canada's relations with China stems from the fact that products imported from China are often suspected of being manufactured in conditions that do not meet human rights or environmental protection standards. Apart from a few exceptions, Canadian companies have a strong tendency to import Chinese inputs and our retail stores sell Chinese products.

In addition, Canada signed a bilateral investment treaty with China to encourage Chinese companies to come to Canada. As Canadians, our investment funds and pension funds invest in Canadian companies that import Chinese products and in Chinese companies that set up shop in Canada. Although the people running the investment and pension funds are, in most cases, well-intentioned people who want to invest in companies that do business in a sustainable and socially responsible way, they don't have the tools to know whether that is actually the case.

Some countries have solved that problem by passing legislation requiring businesses operating within their jurisdictions to meet due diligence, or duty of vigilance, requirements. France introduced such requirements in 2017. Germany will have its own set as of January 1, and Mexico will likely be bringing in very ambitious legislative measures in the near future.

Under these duty of vigilance laws, countries require businesses to provide employee training on compliance with human rights and environmental protection standards. Companies are encouraged to identify areas in the supply chain where non-compliance is a possibility, and they are required to take the necessary steps to avoid or stop those violations. Companies that don't can face fines and other penalties, including not being allowed to bid on contracts for a given period of time.

Countries with this type of legislation also provide access to legal remedies so that the victims of these violations, usually foreign workers, can seek restitution through domestic courts. Lastly, under this legislation, companies have reporting requirements. Ideally, the information is available to the public.

Every year, companies have to compile data, show that they have taken steps to avoid doing business with non-compliant suppliers and indicate where their product inputs are from.

So far, Canada has not imposed any due diligence requirements on companies operating here. That means Canadian businesses are under no obligation to show that the products they import, which they sell or use as inputs, were made in compliance with human rights and environmental protection standards.

Of course, some companies have established their own due diligence requirements, but on their terms. Many have not, and most importantly, there is no list or database that an investment or pension fund can check to know exactly how much a company truly meets human rights and environmental protection standards throughout its supply chain. As we all know, China is home to much of those supply chains.

Last week, more than a hundred academics—myself included—signed a letter calling on the Prime Minister to make human rights and environmental due diligence mandatory for Canadian corporations. As mentioned in the letter, for over two decades, the Canadian government has merely said that it expects Canadian companies to respect human rights, but that strategy isn't working.

In short, Canada must adopt similar legislation if it wants to be at the forefront of respecting human rights and protecting the environment, if it wants to fulfill its international obligations and if it wants to meet its UN sustainable development goals. Canada has a duty to make sure that the products coming into the country were not made in conditions that violate human rights or damage the environment. It also has a duty to make sure that we aren't investing in companies guilty of these violations. Without a mandatory human rights and environmental due diligence law, our companies and importers are under no obligation to take a close look at what they are importing or show accountability. With such legislation, our investors, endowment funds and pension funds will have no choice but to do the right thing.

If Canada truly cares about making sure the goods and investments we buy here support sustainable and responsible business practices, there is no reason not to follow the lead of France, Norway, the Netherlands and Germany, all of which have adopted modern and progressive laws.

Thank you, Mr. Chair.

[The Chair, Liberal, Ken Hardie]

Thank you, Dr. Dufour.

Now we'll go to Dr. Murphy for five minutes or less.

[Dr. Laura Murphy, Professor, Human Rights and Contemporary Slavery, Sheffield Hallam University, As an Individual]

Hello. Thank you for inviting me to speak before this committee today and for the opportunity to present alongside these esteemed colleagues, including members of the affected Uighur community.

It is now widely known that the People's Republic of China is conducting a program of repression in the Uighur region unlike anything we have ever seen in our lifetimes. The PRC's deliberate, iron-fisted governance strategy in the region operates through at least three intersecting mechanisms of control. These are internment, surveillance and forced labour.

Together, these three mechanisms are tools designed to suppress not only dissent, but also culture, religion and population demographics of the Uighur people. They function to control everyday behaviours and seek even to control the very thoughts of Uighurs and other minoritized peoples.

Internment and surveillance serve as a form of coercion that ensures that Uighurs become a docile and compliant workforce in factories across the region and, indeed, across China.

Sheffield Hallam's research, which I'm the lead author on, has been presented in six in-depth studies that have found that companies are complicit in the PRC's system of repression in that they participate in the recruitment, forced migration, indoctrination, confinement, surveillance and disciplining of Uighur people both inside and outside the factories and farms the companies operate. They are an integral, active and, even, enthusiastic part of the ongoing genocide in the Uighur region.

Recent research we conducted to identify whether companies known to be complicit in this system were being listed by index funds found that the MSCI, one of the leading index funds in the world and an index that is used as a benchmark for most others, includes at least 13 companies that have been identified in credible media and other research reports as being involved in the internment, surveillance and forced labour in the Uighur region. Some of these companies have even been sanctioned by the U.S. government, and still they remain on these lists that determine much about where our retirement and investment dollars go.

For instance, one of those companies, China Railway Group Limited, is on several MSCI indexes and is the literal architect of the Tumxuk prison in the Uighur region. It's a place that was transformed from an ordinary prison into a de facto internment camp where people are detained simply for practising their religion, without due process or a fair trial.

ZTE, a partially state-owned telecom company is also on the MSCI indexes. It has advertised that its products have been used to “monitor the political opposition, activists and journalists” of China.

Hoshine Silicon Industry Co., a privately owned but heavily state-subsidized company that makes products for the solar and automotive industries, among others, has been involved in the transfers of hundreds of Uighur people against their will to factories and mines deep in the desert of the Uighur region. It has admittedly taken them away from their families and farms to be “transformed” into ideal worker-citizens.

These findings were the result of a simple review of index funds based on publicly available knowledge that has been widely exposed by the media. Actively invested funds also invest in stocks of a vast array of complicit companies, including the ones I just named. Asset managers would only need to do a simple Internet search for some of these companies to know the extent of their participation in these rights violations.

Many people have no idea that their pensions and investments are being used for the benefit of companies that profit from the oppression of the Uighur people. Governments should ensure that their citizens aren't unwittingly reaping the dividends of this human rights crisis.

Thank you.

[The Chair, Liberal, Ken Hardie]

Thank you very much, Dr. Murphy.

Now we'll go to Mr. Tohti. You have five minutes for your opening comments, sir.

[Mehmet Tohti, Executive Director, Uyghur Rights Advocacy Project]

Thank you, Chair.

Thank you, members, for this opportunity.

First of all, I apologize that my voice is muffled. Yesterday I shouted too much against the Chinese embassy and the University of Ottawa.

I will be providing testimony on Canadian investments in the Uighur genocide today from the perspective of university funds. This is a reality across Canadian pension funds, university endowment funds and other organized funds, and it must be stopped.

There are enough reports that detail the complicity of Canadian federal pension funds as well as provincial pension funds in the Uighur genocide. These pension funds have directly or indirectly invested in companies that are tied up with the Uighur genocide, Uighur forced labour, construction of repressive infrastructure such as concentration camps and prisons, surveillance technology that is part of an integrated joint operational platform that is used for immediate identification and the arrest of Uighurs and others with ethno-religious profiles. Through investments in companies conducting surveillance of the Uighur diaspora, we are complicit in the transnational repression of more than 2,000 Uighur Canadians, our neighbours and friends.

Earlier this year, in March, two young undergraduate students from McGill University uncovered that $15 million of their school's $1.9 billion endowment fund was invested in the Uighur genocide through companies tied up in Uighur forced labour and surveillance. After we invested more time into finding matches for McGill's investment portfolio, we found that investments reached nearly $100 million. Some of the companies McGill invests in are directly linked to labour transfer programs in the Uighur region. They include mining companies. Others are involved with surveillance technology, like Alibaba, or a technology that controls smart prisons used to detain Uighurs, like Tencent. Some are sanctioned by the United States. They are still on the sanctions list.

This is likely not an isolated event. We suspect that all or most Canadian universities' investments are similarly complicit in the Uighur genocide. We are collecting additional research to expand this.

Meanwhile, students at McGill have mobilized and are urging their school to divest from companies implicated in the Uighur genocide and to change its investment portfolio to reflect the students' interests and commitments to protect their human rights.

We must also protect our country's principles and obligations. The Canadian Parliament recognized the Uighur genocide in February 2021. Widespread Uighur forced labour is undisputed. Since that time, Canada pension plan's investments in China have only grown.

This paradox can be seen throughout our government. As we release business advisories on Canadian companies and table forced labour legislation that will, at best, prevent goods being imported from the Uighur region, even if it is successful at that, we carry on making money off of our cowardly business relationship with China and deepen our business ties, despite warnings and statements by senior government officials.

Given the gravity and scope of this issue, the ongoing Uighur genocide and lack of action by the government, forced labour and the lack of enforcement by the CBSA, China's interference in Canada, and our public funds' heavy investments in companies tied to the UIghur genocide, we've come to believe that strong legislative action is needed more than ever to reflect, at least, senior government officials' statements on this matter.

It must be a painful moral bankruptcy for each and every one of us sitting here to receive a pension at some point in our lives tainted by the genocide we once condemned unanimously.

Thank you.

[The Chair, Liberal, Ken Hardie]

Thank you very much, Mr. Tohti.

We will now go to our first round of questioning. We'll begin with Mr. Chong for six minutes or less.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Mr. Chair, and thank you to our witnesses for appearing.

This is a very important issue. This Parliament has recognized that a genocide is taking place in Xinjiang against the Uighur and other Turkic Muslim minorities in the region, some 12 million of whom are living in an open-air 24-hour surveillance state. It's an open-air prison, I would add.

The Government of Canada has had laws on the books now for two years that have banned the import of products produced using forced labour, something that was brought in by the government to bring our statutes into compliance with the United States, Mexico, and the Canada Free Trade Agreement. Despite that, products continue to flow in.

Let's just set that aside right now. It seems incongruous that we would ban products produced by companies that are using forced labour but still allow Canadian investors and pension funds, directly or indirectly, to invest in those very companies. To me, that seems to be a bit of a loophole in current Canadian policy.

My first question is this. In the United States, the Americans have listed firms that U.S. investment firms, pension funds and others are banned from buying or selling Chinese equities. Initially, there was a list of about 30 firms. It think it's now been expanded to about 60 firms where American investors and pension funds are prohibited from buying or selling shares of these Chinese equities.

Do you think that is a model to be followed, that the Government of Canada could list equities of these firms in the People's Republic of China that are on the banned list? Would that be a way to affect the policy, or is there a better policy solution than that?

That's for all of the witnesses.

[The Chair, Liberal, Ken Hardie]

Perhaps we can ask Dr. Murphy to respond if she has a response to this.